Unemployment edges up in Birmingham's region as UK rate falls

Unemployment in the region around Birmingham has risen slightly, even as the rate across the UK has fallen to its lowest level in more than a year, according to official figures published on Tuesday.

Data from the Office for National Statistics shows that 5.7 per cent of people aged 16 and over in the region were unemployed in the three months from June to August. That was up by 0.5 percentage points on the period from March to May.

The share of 16 to 64-year-olds in work fell by 0.9 points to 72.5 per cent over the same period. The economic inactivity rate, which counts people who are neither working nor looking for work, such as students, carers and those who are long-term sick, rose by 0.3 points to 22.8 per cent.

A different picture nationally

Across the UK, unemployment fell unexpectedly to 4.7 per cent in the three months to August, down from 4.9 per cent. It was the lowest rate since the three months to July 2025.

More up-to-date figures suggest the number of people on company payrolls rose by about 13,000 between August and September, after a revised increase of just 1,000 the month before.

Average regular pay, excluding bonuses, grew by 3.7 per cent in the three months to August, up from 3.5 per cent. Once inflation is taken into account, pay is still rising, by 0.8 per cent in real terms.

Vacancies at a five-year low

The number of job vacancies fell by 21,000 to 691,000 in the three months to September, a fresh five-year low and the biggest drop since the start of the year.

David Freeman, deputy director of labour market statistics at the ONS, said: "While the labour market remains broadly flat in 2026, data from the latest quarter shows the employment rate edging up and a small drop in unemployment."

"The number of workers on payroll remains slightly down over the same period, though data for the most recent month suggests that might be starting to level off," he said.

"The number of vacancies has seen its largest fall since the start of the year, concentrated mainly within smaller businesses, which cite increased labour costs as a key factor. Regular wage growth remained relatively stable, though total pay, including bonuses, has eased to its lowest rate in nearly six years."

Why it matters for Birmingham

Birmingham has long had one of the highest unemployment rates of any major city in the UK, and the regional figures are closely watched by employers and the council. A rising rate locally while the national picture improves suggests the region is not yet sharing evenly in any recovery.

The fall in vacancies among smaller firms is likely to be felt in a city where small and medium-sized businesses make up most employers. Business groups have warned that higher labour costs are making them think twice about hiring, and many will be watching next week's budget for any further changes.